The Impacts of Transport System Changes on Labor Market and Their Evaluation

Metsäranta HeikkiRiukula KristaKauhanen AnttiFornaro Paolo


In this project, we study how changes in transport can affect labour markets, how these effects can be analysed and how they can be incorporated in transport appraisal frameworks. We propose an approach to integrate the impact of transport changes on labour markets in the current project appraisal scheme and we suggest further research questions.

Previous theoretical works have identified three ways how accessibility changes due to transport projects can impact labour markets: through labour demand, supply and matching. However, the theoretical direction of the effects of transport projects on labour markets is not univocal, thus the study of these impacts is largely an empirical question. The recent empirical literature has found that the impacts of transport infrastructure changes on labour markets are small and difficult to quantify reliably. Moreover, there is a general consensus that a large part of these effects can be ascribed to the standard cost-benefit analysis, and that the so-called wider economic impacts should be included in specific circumstances.

A four-level framework is proposed to assess the impacts of transport infrastructure changes on the labour market: 1) a qualitative description of the possible impact channels, 2) a description of the local changes in accessibility, 3) a monetary evaluation of the transport user benefits at the local level and 4) a monetary evaluation of the wider-economic benefits. To perform the level-1 assessment, knowledge of the direct benefits of the transport project on the transport system is required. For the level-2 and level-3 evaluations, a comprehensive transport model is required. Further research is needed to develop techniques to carry out the level-4 evaluation.

Future research should tackle the development of a nationwide transport model, which would allow the calculation of a historical measurement of local accessibility. Moreover, future empirical research should be based on individual-level panel data with detailed geographical information.

Publications of the Government’s analysis, assessment and research activities 2019:69.

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Traffic systems, Labor market, Transport projects, Transport economy, Economic effects, Research, Research activities
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